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Closing Price Reversal Bottom: A closing price reversal bottom can be defined as follows: following a prolonged move down in terms of price and time, a market has a lower-low than the previous time period, a higher-close, a close above the time period’s mid-point, and a close above the opening. If this occurs, consider this a sign that the market has bottomed and that the trend is getting ready to turn up.
Closing Price Reversal Top: A closing price reversal top can be defined as follows: following a prolonged move up in terms of price and time, a market has a higher-high than the previous time period, a lower-close, a close below the time period’s mid-point, and a close below the opening. If this occurs, consider this a sign that the market has topped and that the trend is getting ready to turn down.
Cycles: Gann tried to build analysis tools that were geometric in design. When looking at anniversary dates he saw a series of one-year cycles. In geometric terms, the one-year cycle represented a circle or 360 degrees. Building on the geometric relationship of the market, Gann also considered the quarterly divisions of the year to be important timing periods. These quarterly divisions are the 90-day cycle, the 180-day cycle, and the 270-day cycle.
